Apapa looks to the hinterland

Monday, November 24, 2014Anders Rosendahl

In eight years, the Apapa Container Terminal in Nigeria has eliminated waiting times for vessels, improved facilities and kept ahead of 10% annual growth. Now it is turning its attention beyond its gates. By joining efforts to boost the revitalised railway, the terminal wants to tap into remote markets in the hinterland.

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Initially, freight service from Apapa to Kano consisted of a weekly train carrying 20 containers, a drop in the ocean compared to total volumes, but the message resonated loud and clear: the railway was back.

Apapa and APM Terminals in brief

Since APM Terminals took over the Apapa Container Terminal in 2006, volumes at the terminal have grown by 10% each year on average. In 2013, throughput was just shy of 650,000 TEU.

APMT has carried out two investment and expansion programmes, which have seen the terminal keep up with growth, eliminate vessel waiting times and improve safety, reefer capacity and facilities in general.

Eliminating waiting times for the vessels allows shipping lines to deploy fewer vessels in their networks. This corresponds to millions of dollars in savings, which translates into better freight rates for Nigerian importers and exports.

Apapa is continuously seeing new shipping lines call the terminal, increasing competition. During the summer of 2014 two new carriers began calling the terminal, introducing more competition to the benefit of importers and exporters alike.

It only takes one look at the bumper-to-bumper trucks inching away from the Apapa Container Terminal in Lagos to understand Nigeria’s ambition to put freight on rail. Swelling volumes of imported goods, primarily in containers, are simply outstripping road capacity, and at a rapid pace.

“After taking over the terminal in 2006, we have made big improvements inside our gates, reducing the waiting time for vessels from up to 30 days to zero. Now we are looking at the infrastructure beyond our gates,” says Andrew Dawes, Managing Director at Apapa ­Container Terminal.

Every day, hundreds of containers are hitched to trucks in the ports of Lagos and taken into the country. In addition to the congested roads, the different legislation, procedures and processes of the various states create delays, making the 1,000 km between Lagos and Kano in the north roughly a one-week truck journey.

In logistics, where time is money, this lengthy trip translates into cost for importers and exporters.

“We have a very good partnership with the Nigerian Railway Corporation, and customers are happy with the services. They are looking to channel more cargo to the railway,” says Daniel Odibe, Operations Stakeholder Manager at Apapa Container Terminal, while overseeing the loading of the next train to depart from the terminal.

Boosting trade
Eyebrows were therefore raised when Nigeria’s government began renovating its railways and reopened the Lagos-Kano line in 2012. Kano is Nigeria’s second-largest city, with 16 million people in its surrounding area.

Kano’s predominantly agrarian economy produces cash crops such as cotton, acacia gum, ginger and iron ore, which all need to be shipped to buyers overseas. Today, the trip to the ports in Lagos is a tedious one, but APMT Inland Services aims to change that by building an inland container depot (ICD).

“We want to take port operations all the way up the northern corridor, and a container depot in Kano will alleviate a lot of logistics challenges for importers and exporters, ultimately boosting trade,” says Daniel Kayode, commercial manager at APMT Inland Service, adding:

“We believe that the timing is right for the ICD, ­because the train gives us the opportunity to deliver ­containers in a very cost-effective way. So certainly the train service is going to be the differentiator.”

“APMT has been one of the foremost partners that we’ve developed working relationships with in this transformation of the railway,” says Niyi Alli, Director of Operations at the Nigerian Railway Corporation. His goal is to move 90% of the volumes from Lagos to the north by rail.

At the University of Lagos, Professor Ndubisi I. Nwokoma of the Department of Economics recognises the progress that has been made with the railway. He sees the first steps as being the most difficult.

“The train to Kano represents a lot of progress. ­Additions are coming quite fast, and I see the rail as something very beneficial because it can take most of the freight that goes by road, which can help sustain current road infrastructure and avoid accidents,” he says.

“With the railway link to the container terminal in Lagos, our inland container facility in Kano will alleviate a lot of the logistics challenges that importers and exporters of northern Nigeria face today,” says Daniel Kayode, Commercial Manager at APMT Inland Service.

It takes the train three days to reach Kano from ­Lagos, and the weekly service is about to expand.

“APMT is one of the organisations committed to supporting the government’s initiative to move containers out of the port by rail,” says Niyi Alli, Director of ­Operations at the Nigerian Railway Corporation, which operates the railway.

“We are about to enter the next phase with them, where we will have three trains a week out of the Apapa Container Terminal.”

The Apapa Container Terminal is currently upgrading its rail facility inside the terminal. Going from a single track to four will see train carriages loaded with containers fresh off the vessels, ready to be taken north when the train arrives from Kano carrying containers loaded with exports.

“We would like to see daily trains in the future, and are keen to partner with the government to deliver their desired goals for trade facilitation within the country. This is something we believe in,” says Andrew Dawes

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From 1% to 90%
Initially, freight service to Kano consisted of a weekly train carrying 20 containers, a drop in the ocean compared to total volumes, but the message resonated loud and clear: the railway was back.

“Rates for moving commercial goods on the train are much cheaper than by road. It’s a saving grace for the northern economy,” Kano businessman Bashir Borodo told the Financial Times shortly after the rail service was resumed, describing the effect as “dramatic”.

A year and a half later, the sentiment is echoed by the railway operator.

“The weekly train was a pilot phase and it has been reliable and successful. What we are now looking at is moving to the next level, looking at how we can increase the volumes significantly,” says Niyi Alli of Nigerian ­Railway Corporation.

Well aware that it will not happen overnight, his intention, in line with the government’s 25-year strategic vision for the rail, is nonetheless to move 90% of the volumes from Lagos to the north by rail.

“At the moment we are carrying maybe 1% of this amount, and that has to do with line capacity, awareness and the continuous improvement of the rail. The targets are ambitious, but we expect to meet them over the years,” he says.

A.P. Moller - Maersk

A.P. Moller - Maersk is an integrated transport and logistics company with multiple brands and is a global leader in container shipping and ports. Including a stand-alone Energy division, the company employs roughly 88,000 employees across operations in 130 countries.